A prepaid card includes a prepaid card identifier and is associated with a consideration for which the prepaid card can be redeemed. The consideration can be anything of value to a card recipient, such as products or services. Partial redemption is possible if the consideration can be prorated. For example, a prepaid card can be a retail store gift card with a dollar value, a prepaid cellular airtime card, or any other prepaid card that redeems for multiple products or instances of a service.
In one embodiment, a card purchaser purchases a prepaid card. The card purchaser can then provide the prepaid card to a card recipient, for example, as a gift. Such prepaid cards currently have annual US sales of $25 billion.
The card purchaser can purchase prepaid cards in bulk for distribution as gifts in promotional or marketing activities. Purchasing multiple prepaid cards in this manner can allow the card purchaser to obtain a volume discount from a prepaid card provider.
Such prepaid cards are distributed to card recipients as part of a promotion or marketing activity. Many prepaid cards can remain unused by the card recipients. This creates waste for the card purchaser in the unused prepaid cards or prepaid card balances. Further, paying the card purchase price does not benefit the card purchaser until the prepaid cards are redeemed by the card recipients, when the promotional or marketing benefits accrue.
Previously, a card purchaser pays for a prepaid card at the time of purchase, for example, with currency or a currency-equivalent. A card purchaser wishing to purchase one or more prepaid cards from a retail location, such as a store or an automated kiosk, receives the prepaid cards in exchange for payment. This is disadvantageous to the card purchaser if there will be delay between the purchase and the redemption of the prepaid card. The delay can tie up the card purchaser's liquidity and currency while providing no benefit to the card recipient until the prepaid card is redeemed.
Previously, retail stores receive prepaid cards from wholesalers for in-store placement and sale to card purchasers. In some instances, retail stores only pay the wholesalers for the prepaid cards when the prepaid cards are purchased by the card purchasers. This is advantageous to the retail store by minimizing inventory and carrying costs of the prepaid cards. However, as retail stores compete with each other to obtain better distribution arrangements with prepaid card providers, it would be advantageous to offer a more flexible payment system.
Thus, an improved method of charging the card purchaser for the prepaid cards is needed.